Financial Planning and Budgeting

Financial literacy refers to the knowledge and understanding of financial concepts, enabling individuals to make informed and effective decisions regarding money.

True

<p>A central bank oversees the monetary system and regulates the banking sector, acting as the banker to the government and other banks.</p> Signup and view all the answers

<p>Offering investment services</p> Signup and view all the answers

<p>Retail banks focus on individual consumers, offering services like savings accounts, personal loans, and credit cards, while commercial banks cater primarily to businesses, providing services such as business loans, lines of credit, and corporate accounts.</p> Signup and view all the answers

<p>Development banks provide long-term capital for key sectors like industry, agriculture, and infrastructure, often offering low-interest loans to support development projects.</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>E-banking offers convenience, speed, reduced costs, and customization, allowing customers to access their accounts, manage finances, and perform banking transactions anytime, anywhere.</p> Signup and view all the answers

<p>Digital scanning</p> Signup and view all the answers

<p>A CIBIL score is a three-digit number that ranges from 300 to 900. It represents how likely you are to repay your loans or credit on time. The higher your CIBIL score, the more trustworthy you appear to banks and financial institutions.</p> Signup and view all the answers

<p>Key factors include timely payment history, low credit utilization, a long credit history, a balanced mix of secured and unsecured loans, and limited new credit inquiries.</p> Signup and view all the answers

<p>Using full credit limit</p> Signup and view all the answers

<p>An ATM is a machine used by bank customers to perform basic banking tasks without needing to visit a branch.</p> Signup and view all the answers

<p>Net banking allows you to do banking transactions online through the bank's website or mobile app. It provides convenient access to banking services anytime, anywhere.</p> Signup and view all the answers

<p>RTGS is used to transfer large amounts of money from one bank to another in real-time (immediately) and on a gross basis (individually, not in batches).</p> Signup and view all the answers

<p>RTGS processes transactions in real-time (immediately), while NEFT processes transactions in batches (usually every half hour). RTGS is ideal for urgent transactions, while NEFT is suitable for routine transfers.</p> Signup and view all the answers

<p>IMPS is an instant, real-time interbank fund transfer service, allowing transfers 24x7, even on holidays. It's considered the fastest method for transferring funds.</p> Signup and view all the answers

<p>The two main types of ECS are ECS Credit and ECS Debit. ECS Credit is used by organizations to credit payments directly to accounts, while ECS Debit is used to collect payments directly from accounts.</p> Signup and view all the answers

<p>Timely payments</p> Signup and view all the answers

<p>A debit card is a payment card linked directly to your bank account. It allows you to spend money by deducting it directly from your account.</p> Signup and view all the answers

<p>App-based payment systems allow you to make payments through smartphone applications, such as PayPal, Google Pay, or Apple Pay.</p> Signup and view all the answers

<p>A bank draft is a guaranteed payment method issued by a bank on behalf of a customer. The bank guarantees the payment.</p> Signup and view all the answers

<p>A pay order is a payment instrument issued by a bank, guaranteeing that a specific amount will be paid to a named recipient.</p> Signup and view all the answers

<p>The Banking Ombudsman Scheme is designed to handle unresolved complaints between banks and customers, ensuring fair treatment and resolving disputes.</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>The Indian Post Office offers a wide range of financial services, including savings accounts, recurring deposits, term deposits, monthly income schemes, Kisan Vikas Patras, National Savings Certificates, Public Provident Funds, Senior Citizen Savings Schemes, Sukanya Samriddhi Yojana, and money transfer services.</p> Signup and view all the answers

<p>Provides coverage for a specified period.</p> Signup and view all the answers

<p>Term life insurance provides only death benefit coverage for a specified period, while endowment policies combine life insurance with savings, offering a lump sum payout upon survival at the end of the term. Endowment policies are suitable for individuals seeking both protection and savings.</p> Signup and view all the answers

<p>Pension policies help individuals plan for retirement by providing a regular income (pension) after they retire, ensuring financial security in old age.</p> Signup and view all the answers

<p>Unit Linked Insurance Plans (ULIPs) are a combination of investment and insurance, combining life cover with investment options in equity or debt funds.</p> Signup and view all the answers

<p>Health insurance covers medical expenses incurred due to illnesses, accidents, or surgeries. It can cover hospitalization, medication, and other healthcare costs.</p> Signup and view all the answers

<p>Waiting period</p> Signup and view all the answers

<p>Property insurance protects an individual's property, such as a home or shop, against risks like fire, theft, natural disasters, or other damages.</p> Signup and view all the answers

<p>Bull market: Stock prices are rising.</p> Signup and view all the answers

<p>A stock split is when a company divides its existing shares into multiple shares. This makes the shares more affordable for small investors, encouraging participation in the stock market.</p> Signup and view all the answers

<p>A dividend is a payment made by companies to their shareholders from their profits. Dividends are usually paid quarterly or annually and serve as a reward to shareholders.</p> Signup and view all the answers

<p>A buyback occurs when a company repurchases its shares from the stock market. This reduces the number of shares available in the market and can increase the value of remaining shares.</p> Signup and view all the answers

<p>A DEMAT account is used to hold shares and securities in electronic form. It's essential for trading in stock markets, as it eliminates the need for physical share certificates.</p> Signup and view all the answers

<p>Debentures have a fixed maturity date, while preference shares do not.</p> Signup and view all the answers

<p>Blue chip stocks are shares of well-established, financially stable, and reputable companies with a history of strong performance.</p> Signup and view all the answers

<p>Defensive stocks are less affected by economic fluctuations and tend to be more stable during downturns. They are often found in sectors like utilities and consumer goods.</p> Signup and view all the answers

<p>Short-term capital gains are profits from the sale of assets held for a short period (usually less than a year). Long-term capital gains are profits from the sale of assets held for a longer period (typically over a year).</p> Signup and view all the answers

<p>A mutual fund is a type of investment where money is pooled from multiple investors and invested in a diversified portfolio of stocks, bonds, or other assets. It's a popular choice for new investors.</p> Signup and view all the answers

<p>A cash credit account is a short-term loan offered by banks to businesses to meet their working capital requirements; it allows businesses to withdraw more than their account balance, up to an agreed-upon limit.</p> Signup and view all the answers

<p>A mortgage is a secured loan where the borrower pledges property (usually real estate) as collateral to the lender. The loan is repaid in regular installments over a period of time.</p> Signup and view all the answers

<p>A reverse mortgage allows senior citizens to convert the equity in their home into a loan or regular income stream, without needing to sell the property. The loan is repaid when the borrower either sells the home, moves out permanently, or passes.</p> Signup and view all the answers

<p>Hypothecation refers to pledging movable assets as collateral for a loan without transferring possession to the lender. The borrower retains possession and usage of the asset. In a pledge, the asset is physically transferred to the lender as collateral. The lender holds possession until the loan is repaid.</p> Signup and view all the answers

<p>A microfinance loan is a small loan provided to individuals or small businesses who do not have access to traditional banking services. It's a crucial source of funding for low-income individuals and micro-entrepreneurs.</p> Signup and view all the answers